European equity markets rose Thursday, lifted by shares in French and German carmakers which accelerated after US President Donald Trump pulled back a threat of tariffs on the sector.

However, Wall Street stocks were pressured by Facebook's plunge and the decline in American auto brands still feeling the pain of US tariffs on steel and aluminum.

Trump and European Commission chief Jean-Claude Juncker on Wednesday announced a truce to ease the escalating dispute.

The plan was well received, with ECB chief Mario Draghi calling it "a good sign", although EU heavyweight France skeptically said the bloc could not negotiate under the threat of tariffs.

Frankfurt stocks led the way, with Paris showing lesser gains.

London was a touch higher at the close, held back by a strengthening pound against the euro and some weak corporate results.

US stocks mostly fell as investors reacted to the trade announcement with a mixture of optimism and caution.

Facebook's reality check

The tech-rich Nasdaq Composite Index fell one percent to 7,852.18, dragged down by Facebook, which lost nearly 20 percent, its biggest daily loss ever after the company warned of weaker growth.

The decline wiped out some $100 billion -- believed to be the worst single-day evaporation of market value for any company.

The broad-based S&P 500 shed 0.3 percent.

US agricultural equipment makers Deere & Co. and Agco both advanced but American car brands lost ground after they slashed profit forecasts on Wednesday in part due to higher supply costs from US tariffs on steel and aluminum.

Frankfurt-listed shares in Volkswagen, BMW and Daimler all gained ground, while in Paris Peugeot-owner PSA and Renault also pulled away with solid increases.

"Going into the meeting, Trump was talking about imposing 25-percent tariffs on EU cars, and now a trade war has been averted," CMC Markets analyst David Madden told AFP.

"No agreement has been put in place but this is a step in the right direction."

US tariffs on autos would hurt the German car industry in particular.

To start the day off, the ECB left interest rates unchanged at a regular meeting and said its planned exit from massive stimulus measures was on track.

Steel next?

Trump and Juncker also vowed to look at existing duties on steel and aluminum imposed by the US that had angered the EU.

"News that US president Trump has decided to refrain from imposing car tariffs on EU automakers has unsurprisingly been warmly greeted on the continent with shares in the sector moving firmly higher," XTB analyst David Cheetham told AFP.

"Talk of tariffs as high as 25 percent on cars imported into the US had presented a major threat to the level of demand for EU manufacturers, in what is a key market for them.

"The latest developments suggest that this is no longer as large a concern."

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